Manorial Rights Indemnity Insurance Bank conveyancing requirements
Accord and HSBC, like the majority of mortgage companies, set their own specific instructions when it comes to manorial rights indemnity insurance. The purpose of this page to assist domestic conveyancing firms on the various lender conveyancing panel where the title to be charged incorporates manorial rights. It is not a substitute for checking the CML handbook requirements for each bank, be it Birmingham Midshires, Natwest or Halifax. The information on this page Is not to be read as manorial rights indemnity insurance advice.
Need help with manorial rights indemnity insurance from your lender?
Godiva Mortgages and Santander as with the majority of mortgage companies, obligations require that where manorial rights indemnity insurance is to be taken out:
- the manorial rights indemnity insurance policy should be placed on risk without charge to the lender
- your practice must approve the terms of the manorial rights policy on behalf of the mortgage company
- you must explain to the mortgagor that the borrower is obliged to adhere to any conditions of the manorial rights indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in relation to the insurance
- your firm must send a duplicate of the manorial rights indemnity insurance to the borrower and explain to the mortgagor why the manorial rights indemnity insurance policy was effected and that additional insurance may be mandatory if there is additional lending against the mortgaged property
- the manorial rights indemnity insurance policy must be in favor of the lender and, wherever possible, for the benefit of the borrower and any future registered proprietor or bank. Where the borrower will not be covered by the manorial rights indemnity insurance policy, you must advise the mortgagor of this fact.
- the manorial rights indemnity insurance policy should not incorporate terms which you know would void or prejudice the interests of the lender
- the minimum level of cover for the policy must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
- your firm is obliged to disclose to the insurer all relevant information which you have obtained
| Lender | Requirement |
|---|---|
| Accord Mortgages | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Chelsea Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| Hodge Equity Release | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| ITL Mortgages | Minimum of the value of the property. |
| Lloyds | The value of the property. |
| Lloyds Bank Private Banking | Not less than the Facility plus 10%. |
| Masthaven Bank | An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| Perenna | The higher of the purchase price or valuation. |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Progressive BS | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| TSB | The value of the property |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
General Manorial Rights indemnity insurance points to consider
The full terms, conditions and exclusions for manorial rights indemnity insurance are identified in the policy document. Property lawyers should point your non-lender client to the manorial rights indemnity insurance policy paperwork. The intention of manorial rights indemnity insurance is to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check any draft to determine that it is as it should be. The lifetime of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Manorial Rights indemnity insurance: Important features and benefits:
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Manorial Rights indemnity insurance Policies are likely to cover the following- Reimbursement for compensation incurred in any action concerning the risks specified in the manorial rights insurance, including solicitors charges.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Money paid with the written consent of the insurance company to liberate the property from the risks specified in the manorial rights insurance.
- Market value reduction due to the successful enforcement of the risks specified in the manorial rights insurance.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the manorial rights indemnity insurance, to the extent that such costs are rendered abortive by court decision.
- The cost of altering or destroying all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
Don't forget to check what is excluded from the manorial rights indemnity insurance e.g. does the policy cover any property that has been altered within the 12 months prior to the commencement of the policy? Are legal costs covered?
Manorial Rights Indemnity Insurance has limitations - Other considerations
Manorial Rights Indemnity insurance isn’t a solution to all of the relevant problems. Information contained within this webpage is for general information for Regulated law firms in England and Wales on the the bank approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information is in relation to properties in England and Wales.